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Expanded Panama Canal Debuts At A Difficult Time For International Shipping

STEVE INSKEEP, HOST:

It cost more than $5 billion and opened two years behind schedule. But yesterday, Panama's newly expanded canal opened for business. Tens of thousands of people watched. It's a big deal for Panama at a difficult time for the international shipping industry. NPR's Carrie Kahn reports.

CARRIE KAHN, BYLINE: Panama partied hard yesterday...

UNIDENTIFIED SINGER: (Singing in Spanish).

KAHN: ...From sun up when the inaugural ship entered the Caribbean side of the canal to sundown, 12 hours later, when it made its final exit into the Pacific Ocean.

UNIDENTIFIED SINGER: (Singing in Spanish).

KAHN: Public viewing centers throughout the country, complete with live music and Jumbotron TVs, were packed. Images streamed live as the Chinese-owned COSCO Shipping Panama vessel, filled with more than 9,000 cargo containers, crossed the entire 48-mile-long canal. Elisabeth Medianero came to this park along Panama City's picturesque skyline to celebrate.

ELISABETH MEDIANERO: (Speaking Spanish).

KAHN: "Our tiny country has accomplished something so huge, says Medianero. "We showed the world we can do it. And I'm happy, content and proud," she says. It took nearly a decade to construct the new locks, now long and wide enough for the new generation of ships known as Neo-Panamax. These mega-vessels can hold up to 14,000 cargo containers, but are too big to fit through Panama's old locks still in use in the canal.

(SOUNDBITE OF HORN SOUNDING)

KAHN: Tens of thousands lined up to watch the inaugural ship enter and slowly lower through several chambers. Panama's President Carlos Varela beamed before the crowd.

(SOUNDBITE OF ARCHIVED RECORDING)

JUAN CARLOS VARELA: (Speaking Spanish).

KAHN: "Today marks an historic moment for Panama, our hemisphere and the world," says Varela.

Authorities hope to double the amount of cargo coming through the canal with the expanded locks. But the country's $5 billion bet comes at a difficult time for international shipping. Rock-bottom oil prices and China's economic slowdown has sent shipping costs plummeting. Despite the downturn, Anders Boenaes, vice president of Maersk, the largest shipping company in the world, said Panama had to expand. If it hadn't, it would have just kept losing business to other shipping routes.

ANDERS BOENAES: But now, by having done it, at least you can grow with world trade and, most importantly, win back some of what was changed to Suez over the past, say, five, eight, 10 years.

KAHN: Adding to Panama's gamble is growing concern over the design of the new canal's locks. While they use less water than the original ones, a big worry in light of recent drought conditions in the region, critics say the new locks are too short. Londor Rankin, head of Panama Canal's pilot union, says it's going to be a tight fit once you squeeze a mega-ship and two tugboats in there. There's little room for error, he says.

LONDOR RANKIN: It's not what I would have liked. But it's what we got.

KAHN: But despite the worries, nothing could dampen the national pride on parade throughout the inaugural passage yesterday. President Varela says we are proud, as a nation, with our accomplishment. But wait until we use the new revenues from the canal for the good of the country.

(SOUNDBITE OF ARCHIVED RECORDING)

VARELA: (Speaking Spanish).

KAHN: "How much prouder we're going to feel," says Varela, "once we eliminate poverty and inequality once and for all in Panama."

That's a tall order, given that a quarter of Panamanians live in poverty and all the uncertainties in the global economy these days. Carrie Kahn, NPR News, Panama City, Panama. Transcript provided by NPR, Copyright NPR.

Carrie Kahn is NPR's International Correspondent based in Mexico City, Mexico. She covers Mexico, the Caribbean, and Central America. Kahn's reports can be heard on NPR's award-winning news programs including All Things Considered, Morning Edition and Weekend Edition, and on NPR.org.